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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.45 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.45 suggests that the company is not a manipulator.

FLEX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.24   Max: 0.02
Current: -2.45

-6.24
0.02

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 0.02. The lowest was -6.24. And the median was -2.48.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9367+0.528 * 0.8975+0.404 * 2.0798+0.892 * 0.9339+0.115 * 1.1047
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2108+4.679 * -0.0458-0.327 * 0.9945
=-2.45

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,045 Mil.
Revenue was 5772.698 + 6763.177 + 6316.762 + 5566.248 = $24,419 Mil.
Gross Profit was 406.337 + 452.467 + 396.916 + 352.341 = $1,608 Mil.
Total Current Assets was $8,315 Mil.
Total Assets was $12,385 Mil.
Property, Plant and Equipment(Net PPE) was $2,258 Mil.
Depreciation, Depletion and Amortization(DDA) was $515 Mil.
Selling, General & Admin. Expense(SGA) was $955 Mil.
Total Current Liabilities was $6,572 Mil.
Long-Term Debt was $2,709 Mil.
Net Income was 61.344 + 148.91 + 122.977 + 110.85 = $444 Mil.
Non Operating Income was -1.481 + -44.415 + -45.748 + -33.174 = $-125 Mil.
Cash Flow from Operations was 196.673 + 277.777 + 299.719 + 362.276 = $1,136 Mil.
Accounts Receivable was $2,338 Mil.
Revenue was 5951.6 + 7025.054 + 6528.517 + 6642.745 = $26,148 Mil.
Gross Profit was 378.817 + 408.657 + 377.081 + 380.785 = $1,545 Mil.
Total Current Assets was $8,741 Mil.
Total Assets was $11,653 Mil.
Property, Plant and Equipment(Net PPE) was $2,092 Mil.
Depreciation, Depletion and Amortization(DDA) was $540 Mil.
Selling, General & Admin. Expense(SGA) was $844 Mil.
Total Current Liabilities was $6,755 Mil.
Long-Term Debt was $2,026 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2044.757 / 24418.885) / (2337.515 / 26147.916)
=0.08373671 / 0.08939584
=0.9367

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1545.34 / 26147.916) / (1608.061 / 24418.885)
=0.05909993 / 0.06585317
=0.8975

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8315.126 + 2257.633) / 12384.981) / (1 - (8740.9 + 2092.167) / 11652.891)
=0.14632416 / 0.0703537
=2.0798

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24418.885 / 26147.916
=0.9339

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(540.49 / (540.49 + 2092.167)) / (515.367 / (515.367 + 2257.633))
=0.2053021 / 0.18585179
=1.1047

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(954.89 / 24418.885) / (844.473 / 26147.916)
=0.03910457 / 0.032296
=1.2108

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2709.389 + 6572.205) / 12384.981) / ((2025.97 + 6755.091) / 11652.891)
=0.74942335 / 0.75355214
=0.9945

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(444.081 - -124.818 - 1136.445) / 12384.981
=-0.0458

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.45 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.95081.38450.5811.35120.90640.96261.01521.15320.86510.9367
GMI 0.99281.15431.03180.81930.91381.07031.04350.8970.93340.8975
AQI 0.94280.89740.26810.54170.75021.0181.59061.06471.08422.0798
SGI 1.23321.46171.1230.77911.18951.02470.8021.10771.00150.9339
DEPI 1.13440.77690.97890.91511.38680.89870.97211.22460.82191.1047
SGAI 0.9571.08471.00431.00580.89461.05281.14010.98070.96391.2108
LVGI 0.97511.14011.46190.96970.99060.98530.9661.05340.96840.9945
TATA 0.0125-0.1076-0.6331-0.0539-0.0224-0.0239-0.0747-0.0635-0.0123-0.052
M-score -2.25-2.26-6.15-2.89-2.58-2.58-2.75-2.56-2.67-2.48

Flextronics International Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.07361.15321.01240.91990.88040.86510.7941.09791.15480.9367
GMI 1.04530.8970.85510.84670.90890.93340.92570.90720.88370.8975
AQI 0.92391.06471.15131.24681.20151.08421.06151.61972.03762.0798
SGI 1.00151.10771.15291.14641.09081.00150.92990.91810.91370.9339
DEPI 1.23861.22461.17241.03740.84690.82190.86660.9871.05661.1047
SGAI 1.10070.98070.89010.85380.87080.96391.05551.10241.15121.2108
LVGI 1.0571.05341.00180.97790.97470.96840.97820.99640.99050.9945
TATA -0.0637-0.0578-0.0304-0.049-0.0138-0.0158-0.0538-0.0439-0.0333-0.0458
M-score -2.72-2.53-2.45-2.60-2.53-2.68-3.02-2.48-2.23-2.45
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